IV.

STRATEGIC PLAN

A. VISION

A little over a year ago, SPGI introduced their plan to “Power the Markets of the Future

with their essential intelligence”. SPGI provides intelligence that is essential for companies,

governments and individuals to make decisions with conviction.

B. OBJECTIVES

As an employee, I infer from the aggressive mergers and acquisitions the company went

during my tenure, its objective is to provide a one stop shop of data for clients where they can

access information from financial regulatory filings to earnings transcript. This would then mold

them to power markets of the future. Based on the company’s 10K, they have prioritized the

following strategies in 2019 categorized as follows:

Finance

● Delivering revenue growth and EBITA margin targets and delivering on commitments to

return capital to shareholders and create capacity to invest

● Investing for mid- to long-term revenue growth that meets or exceeds market growth

rates

● Pursuing a disciplined acquisition, investment and partnership strategy.

Customer

● Strengthening and growing the core businesses

● Delivering a modern, digital, integrated platform and user experience that enhances

customer value, accompanied by thoughtful user migration plans

● Expanding our presence in China to capture market opportunities

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 ● Building and promoting new products to solve customer pain points and deliver new

commercial propositions in ESG, data marketplace, and small and medium-sized

enterprises

● Enhancing teamwork and adopting commercial tools and processes to improve the clarity

and quality of insights we gather from customers, and improve revenue capture.

Operations

● Transforming technology infrastructure to support growth, improve cost efficiency and

mitigate cyber risk

● Adopting core management systems, tools and processes across the Company to improve

prioritization and agility, drive execution, and reduce complexity

● Developing an enterprise-wide data strategy and execution plan, leveraging machine

learning and data science

● Further enhancing our commitment to our robust risk, internal control and compliance

culture.

People

● Creating an inclusive performance-driven culture that drives employee engagement;

● Promoting internal mobility and attracting and retaining the best people; and

● Improving diversity in overall representation through talent acquisition and retention.

C. EVALUATION OF PRESENT CORPORATE STRATEGIES

To determine which corporate strategy needs improvement, the proponent will be looking

at the 13 Dimensions of Competitive Strategy (Martin, n.d.). Please note the objectives above in

below strategies.

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Dimension Specialization
Kenton (2019) defined this as “method of
production whereby an entity focuses on the
production of a limited scope of goods to gain
a greater degree of efficiency”.

Corporate Strategy Finance: Pursuing a disciplined acquisition,

investment and partnership strategy.
Customer: All strategies applicable

Details Increase company coverage to provide data

for all companies, governments and
individuals worldwide. From their usual data
they provided which is financial data from
banks and insurance companies, they have
acquired Kensho, Panjiva and ESG Ratings
within the last year. Kensho specializes in
Machine learning, Panjiva in Supply Chain
and ESG Ratings in ratings rated by
Environmental, Social and Governance
factors.

Evaluation Needs Improvement

Despite the efforts of expanding the target
market and product lines offered, this still
needs improvement in it integrating these
acquisitions into one platform. For example,
the CapIQ which was acquired in 2004 is still
in the process of being integrated in the S&P
platform today.

Dimension Brand Identification

Lim (2019) defined this as “the visible
elements of a brand, such as color, design, and
logo that identify and distinguish the brand in
consumers' minds”.

Corporate Strategy Finance: Pursuing a disciplined acquisition,

investment and partnership strategy.

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 Customer: Expanding our presence in China
to capture market opportunities
People: Improving diversity in overall
representation through talent acquisition and
retention

Details SPGI is known either for S&P 500 or

McGraw Hill which are the credit ratings and
books college students use, respectively. In
order to strengthen brand image, the company
is expanding through acquisition, capturing
untapped markets and establishing offices
worldwide.

Evaluation Needs Improvement

The proponent is rating this as needing
improvement since whenever I mention S&P,
I would have to mention either S&P 500 or
McGraw Hill.

Dimension Push vs Pull

Push strategy is basically to push a product at
a customer, while a pull strategy pulls a
customer towards a product. Push strategy is a
quick way to move a customer from
awareness to purchase, while pull strategy is
about creating an ongoing relationship with
the brand (WilliamJoseph Communications,
n.d.).

Corporate Strategy Customer: Delivering a modern, digital,

integrated platform and user experience that
enhances customer value, accompanied by
thoughtful user migration plans; Building and
promoting new products to solve customer
pain points and deliver new commercial
propositions in ESG, data marketplace, and
small and medium-sized enterprises;
Enhancing teamwork and adopting
commercial tools and processes to improve

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 the clarity and quality of insights we gather
from customers, and improve revenue capture

Details The company makes use of course of its

relationship managers that contacts client and
perform regular diagnostic conversations on
what they need so that we can recommend
dataset we can offer. SPGI offers as well
trainings on product usage and 24/7 coverage
to support clients on research and product
related issues to maximize product usage.

Evaluation Maintain
Based from my personal feedback, we have a
strong customer service that links the
customers and the product.

Dimension Channel Selection

Kenton (2019) defined distribution channel as
“a chain of businesses or intermediaries
through which a good or service passes until it
reaches the final buyer or the end consumer.
Distribution channels can include wholesalers,
retailers, distributors, and even the Internet”.

Corporate Strategy Finance: Pursuing a disciplined acquisition,

investment and partnership strategy
Customer: Enhancing teamwork and adopting
commercial tools and
processes to improve the clarity and quality of
insights we gather from customers, and
improve revenue capture.

Details SPGI values brand image above all else being

a public company where stocks will be
affected easily by negative news. With this,
we only have direct selling through sales team
and the relationship managers. We tap to new
markets through the existing client list of the
acquired companies and visiting lead

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 companies.

Evaluation Maintain
Due to the risk involved, it would be best to
maintain direct selling to control the team
unlike when having agents.

Dimension Product Quality

The collection of features and characteristics
of a product that contribute to its ability to
meet given requirements. It’s the ability of the
product to fulfil and meet the requirements of
the end user. For a product to be of good
quality it should be reliable and perform all its
functions smoothly (MBA Skool, n.d.).

Corporate Strategy Finance: Pursuing a disciplined acquisition,

investment and partnership strategy
Customer: All
Operations: All

Details Generally, the company’s product would be

the platform and the data we provide. The
company releases updates quarterly based on
enhancement requests of clients. SPGI also
has a data quality program where they offer $
50 for every error found by a client.

Evaluation Needs Improvement

Despite the excellent quality of platform and
data quality, I believe this should still be
improved on the basis of integration of all
dataset as discussed in the specialization
dimension.

Dimension Technological Leadership

A company is classified as a technological
leader when it does not imitate other
competitor products.

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Corporate Strategy Finance: Pursuing a disciplined acquisition,
investment and partnership strategy

Details To support this priority we have more than

doubled the amount of technology
investment devoted to “Change the Business”
initiatives and we’ve acquired or
organically grown capabilities to do things
much differently than we have before. In
2018, we acquired Panjiva and Kensho,
welcoming an amazing group of talented
data science, artificial intelligence and
machine learning experts (Annual Report,
2018).

Evaluation Maintain
It is no doubt that they are heavily investing in
R&D. Due to heavy reliance on technology,
the company makes sure we have the state of
the art equipment to serve the clients at best of
our capability.

Dimension Vertical Integration

Kenton (2019) defined this as “strategy
whereby a company owns or controls its
suppliers, distributors, or retail locations to
control its value or supply chain. Vertical
integration benefits companies by allowing
them to control the process, reduce costs, and
improve efficiencies”.

Corporate Strategy Finance: Pursuing a disciplined acquisition,

investment and partnership strategy

Details SPGI would need data from regulators. For

example, insurance statutory data was only
provided by SNL Shared Services, LLC. SPGI
acquired SNL in 2015 to access the data. They
did the same thing with Capital IQ that covers
private companies outside US.

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Evaluation Needs Improvement
SPGI still needs coverage in non-US market.

Dimension Cost Position

Positioning defines where your product (item
or service) stands in relation to others offering
similar products and services in the
marketplace as well as the mind of the
consumer (The Economic Times, n.d.).

Corporate Strategy Operations: Transforming technology

infrastructure to support growth, improve cost
efficiency and mitigate cyber risk
Customer: Enhancing teamwork and adopting
commercial tools and processes to improve
the clarity and quality of insights we gather
from customers, and improve revenue capture

Details Based on Table I holding second to the last of

the market share, cost is also second to the last
cheapest.

Evaluation Maintain

Dimension Service
As to whether the company provides
engineering assistance or other ancillary
services to customers (Martin, n.d.).

Corporate Strategy Customer: All

Details As mentioned in previous dimensions, the

company has 24/7 coverage to assist clients
worldwide regarding platform and data related
queries. In addition to that, SPGI also has
technical team to support issues regarding
clients’ system compatibility.

Evaluation Maintain

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Dimension Price Policy
Its relative price position in the market. Price
position will usually be related to other
variables as cost position and product quality,
but the price is a distinct strategic variable that
must be treated separately (Tuazon, n.d.).

Corporate Strategy Customer: Delivering a modern, digital,

integrated platform and user experience that
enhances customer value, accompanied by
thoughtful user migration plans; Building and
promoting new products to solve customer
pain points and deliver new commercial
propositions in ESG, data marketplace, and
small and medium-sized enterprises

Details SPGI makes sure that they offer products and

services more attractive than its competitors.
Up to date, it is the only data provider that
offers a $ 50 error reward.

Evaluation Maintain

Dimension Leverage
Operating leverage is an indication of how a
company's costs are structured and is used to
determine the break-even point for a
company. The break-even point is where the
revenue from sales covers both the fixed and
variable costs of production. Financial
leverage refers to the amount of debt used to
finance the operations of a company.
(Maverick, 2019).

Corporate Strategy Finance: Delivering revenue growth and

EBITA margin targets and delivering on
commitments to return capital to shareholders
and create capacity to invest; Investing for
mid- to long-term revenue growth that meets
or exceeds market growth rates;

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 Details Its operating margin is around 50%. In effect,
they have strong leverage.

Evaluation Maintain

Dimension Relationship with Parent Company

Corporate Strategy SPGI is already the holding company.

Details SPGI is already the holding company.

Evaluation NA

Dimension Relationship to home or host government

in foreign countries

Corporate Strategy The company is strictly compliant with

government regulations on the countries they
are operating.

Details The proponent observed this in the Philippine

Makati Office.

Evaluation Maintain

Below is the summarized analysis for all the dimensions.

Table

Summary on the Evaluation of Present Corporate Strategies

Dimension Evaluation

Specialization Needs improvement

Brand Identification Needs improvement

Push vs. Pull Maintain

Channel Selection Maintain

Product Quality Needs Improvement

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 Technological Leadership Maintain

Vertical Integration Needs Improvement

Cost Position Maintain

Service Maintain

Price Policy Maintain

Leverage Maintain

Relationship with Parent Company NA

Relationship to home or host government in Maintain

foreign countries

D. PROPOSED CORPORATE STRATEGIES

Using the results above, the proponent is suggesting below strategy to “Power the

Markets of the Future”. Given the company’s history, it is evident that they use the M&A

strategy to add more products in the platform and reach more markets. The only problem with

this is that the company tends to deprioritize the integration. One example would be the Capital

IQ platform which they have acquired almost 15 years ago but is still in the works. One problem

being noted with the segregation of the Market Intelligence and Capital IQ is the different

methodology used in accounting calculations e.g. one line item like total debt have different

meanings on the platform which can be confusing on which source to use.

Integrating merging companies requires a daunting degree of effort and coordination

from across the newly combined organization (Doherty, Engert & West, 2016). There are three

types of change management which are systemic, project and organizational. This daunting

degree of effort is mostly evident with organizational change management which involves the

planning and implementing of tools, processes, skills and principles for managing the people side

of change to achieve the required outcomes of a project or initiative which is typically used for

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company restructuring, M&A and introduction of new channels, brands or models. Impacted

people are targeted employees/departments, ancillary employees/departments, IT professionals

and stakeholders (Albert and Gustin, n.d.). This is summarized below.

Chart

Types of Change Management

Given that SPGI mostly go through M&As, it will be best to perfect their change model.

Based from Accenture’s Change Model, the change journey has four dimensions which are

navigation, leadership, ownership and enablement.

Chart

Accenture Change Model (One Washington, 2018)

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 In the Navigation dimension, the OCM framework is developed to include change

objectives, priorities and measurement approaches. The Leadership dimension includes the

development of a sponsorship program, the establishment and communication of a shared

executive vision, and setting expectations for the change process. The Enablement dimension

defines communication, training and other related performance management and organizational

design requirements. Lastly, the Ownership dimension is where those impacted by the change

exhibit commitment to the new target state through various involvement activities (One

Washington, 2018). To propose an appropriate strategy, the proponent evaluated SPGI’s current

relative and related dimensions for their Project Smart Move as seen below. Project Smart Move

is a company-wide initiative to move all of their clients towards a single platform, Market

Intelligence. This initiative is years in the making, involved rebranding SNL to MI, eventually

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sunsetting CIQ, and migrating everyone to MI. It is cheaper/easier to maintain one product so

this is good for the company and ultimately be left with an incredibly powerful product unlike

any other in the market as clients will be able to access all the data and tools in a single interface.

Navigation Activities Evaluation

What management
mechanisms will help Program Management ✔
optimize the investment? Framework - Direction and
Pace of Change

Models/Methodologies ✔

Measurement Strategies ✔

Technical/Business ✔
Architecture

Change Objectives and ✔

Priorities

Leadership Shared Executive Vision with ✔

How can the company help Stakeholders
management leaders
effectively champion Coaching/Facilitation ✔
change?
Setting Expectations ✔

Ownership Planning communications and Needs improvement

How can the company help involvement activities
stakeholders feel part of the
change versus victims of Educating impacted personnel Needs improvement
change? on the change process

Developing local action teams Needs improvement

and facilitating
implementation

Enablement Design the organization/jobs Needs improvement

How can the company give
stakeholders the tools and Revise workflows/procedures Needs improvement

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 support to be successful? Redesign physical Needs improvement
environment

Design new/modified jobs Needs improvement

Training and performance Needs improvement

support

Based on evaluation above, SPGI currently lacks strength in the enablement and

ownership stage which is specifically evident in its Project Smart Move. From an internal

standpoint, it is confusing since SNL and CapIQ have overlapping data with different

methodologies. Each dataset have different support and research teams. Being one company

now, it would be ideal to have one dataset with the same methodology to avoid confusion and a

single support team and research team.

Chart

The Change Commitment Curve with Emphasis on the Appropriate Change Model Quadrants for

Each Change Stage (One Washington, n.d.)

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 With that being said, the proposed strategies are as follows.

Proposed Strategy Standardize which methodology to use

Dimension Specialization, Product Quality and Vertical

Integration

Description On the current stage of the project Smart

Move, the detailed process is still unclear.
With the goal of providing a one stop shop, it
is irrelevant to use two methodologies for the
dataset. Example would be in calculating Total
Debt in CapIQ and SNL/MI is different.

Basis Strength: Large number of analysts that are

certified (e.g. CFA, MBA) that can share
insights on the best methodology to use

Opportunity: Growing demand of the industry

Proposed Strategy Providing training for both CapIQ and SNL/MI

employees to better assist the clients and to
have one brand recognition and sunset their

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 classic brands

Dimension Specialization, Brand Identification, Product

Quality and Vertical Integration

Description After standardization, both teams of CapIQ and

MI are needed to support both their clients in
their respective accounts. Merging the support
lines would mean merging the team. It would
be best if everyone knows what they are doing.

Basis Opportunity: Learning experience for the

employees; Since internal clients, hiring
someone new would be expensive. Training
will be cheaper

Strength: Internal users are knowledgeable

already with the platform

E. COMPETITIVE ADVANTAGE

To analyze the firm’s competitive advantage in the industry, the proponent will be using

the Wharton Model Competitive Advantage Cycle as seen below in Chart.

Chart

Wharton Model Competitive Advantage Cycle

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 Present Competitive Advantage

Sources of Advantage

- Superior Assets ● People: They value their talents above

all else as they serve as the direct
contact to clients
● Timely updates in the platform based
on feedback by clients
● Brand: Trusted for S&P 500 and
McGraw-Hill

- Superior Capabilities ● Rigid Employee Selection: All

applicants must successfully pass basic
aptitude, finance and communication
examinations. Usual successful
applicants come from top schools or
people who graduated as top of their
class. In the Insurance team alone,
applicants are either double degree
holders or with Masters degree
● Values feedback: Company makes
changes on platform based on
feedback

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Investments in Renewal ● To remain at par with Bloomberg,
SPGI must keep up with the coverage
criteria of its competitors

Competitive Dynamics Erode Advantages ● Lack of managerial positions on the

non-US offices that decreases
employee retention and increases
employee turnover

Positional Advantages Realized

- Superior Customer Value ● Customer Service: Based from

surveys, the company has a responsive
team with 24/7 coverage with almost
less than 24 hours average turnaround
time

Proposed Competitive Advantage

Sources of Advantage

- Superior Assets ● Maintain talents and provide

consistent support
● Strengthen Brand Recognition from
CapIQ and SNL to Market Intelligence

- Superior Capabilities ● Keep the skilled employee

Investments in Renewal ● With less expenses on maintaining two

platforms, they have more resources to
develop the MI platform at its best and
focus only on this
● Invest in marketing, advertising and
promotions to have the clients
familiarize with the new platform

Competitive Dynamics Erode Advantages ● Lack of managerial positions on the

non-US offices that decreases
employee retention and increases
employee turnover

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 ● Due to the additional workload for
both team, restructuring of salary may
be needed

Positional Advantages Realized

- Superior Customer Value ● Quality Product

● Brand Identification

V. FUNCTIONAL AREAS STRATEGY

Functional areas strategy must be based on strategic plan and competitive advantages.

The areas are Marketing, Operations, Finance, Information and Communication and Human

Resource. Detailed explanations are as follows.

A. MARKETING

The proponent will be looking into the key marketing elements which are the 4Ps -

Product, Price, Place and Promotion - to position the business strategically.

Product

This refers to the products and services offered by a business that includes it

functionality, appearance, warranty, quality and packaging (CFI, n.d.). With the integration, only

one platform should be used with a standardized method.

Price

The pricing strategy for products and services and how it will affect customers. Pricing

decisions do not include just the selling price, but also discounts, payment arrangements, credit

terms, or any other price-matching services offered (CFI, n.d.). With the sunsetting of the other

platform, the company can offer discounts as they will have less developing fees now.

Place and Promotion

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 Place refers to where the product/service of the business is seen, made, sold, or

distributed. In essence, place decisions are associated with distribution channels and ways of

getting the product to target key customers. Promotions in relation to this refers to the activities

that make the business more known to consumers. It includes items such as sponsorships,

advertising, and public relations activities (CFI, n.d.). For the proposed strategy, it will be simply

tapping into the CapIQ clients. Company should be able to convert their accounts from CapIQ to

Market Intelligence.

B. OPERATIONS

Capacity

Kenton (2018) defined this as “the maximum level of output that a company can sustain

to make a product or provide a service. Planning for capacity requires management to accept

limitations on the production process. No system can operate at full capacity for a prolonged

period; inefficiencies and delays make it impossible to reach a theoretical level of output over the

long run”. Since both teams are operating at par, the integration can sustain the queries of the

clients. Though expected delays due to research related cases is expected to sort differences in

methodology.

Standard

To measure the quality, in every query clients turn in to the support, there are surveys

being sent which measures their satisfaction with the platform. There is a comment section to

voice out any point of view whether they think the methodology is wrong so we can revisit.

Standard quality of support will be based on speed and quality.

Inventory

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 Since SPGI is a data provider, its inventory is its data. We maintain historical data as long

as we have the source. CapIQ has data spanning way back 1986. Hence, it was a good

investment considering MI only goes back until 2005.

Schedule

As mentioned in the inventory, the product is the data and the platform. There are

specific timelines to be followed when data should be uploaded on the platform. In any delays,

SPGI assures a $ 50 error reward already.

Control

Audit of data is being done manually in best efforts to promote confidence and quality

data and avoid expenses relating to error rewards.

C. FINANCE

The company has the necessary funds to accomodate any expenses regarding the

proposed strategies.

D. INFORMATION AND COMMUNICATION PROCESS

As mentioned, since CapIQ will be no longer functioning and all users will be migrated

to the Market Intelligence Platform, training for both methods will be needed.

E. HUMAN RESOURCE

As advised, employees from both teams will be retained to accommodate the number of

clients from both accounts.

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